How Manufacturers Can Benefit from Configure, Price, Quote Software
Custom manufacturers demand perhaps the most flexible approach to pricing of any industry. Due to the extreme variance in the products and services job shops supply, these businesses can benefit from quoting software that provides a flexible and consistent framework for turning quotes around quickly and accurately. Configure, Price, Quote (CPQ) software is a great answer to these challenges.
So how do you know if CPQ software will benefit your business? Consider the following questions:
Are you frustrated with your existing quoting system?
Many job shops rely on ERP systems and/or Excel to quote jobs. ERP systems are great in that they allow you to reference data across the entire business. But ERP systems are also notoriously rigid, and do not allow you to bake in automation to your quoting process. Excel is infinitely flexible and allows for more creative approaches to estimation, but it also creates silos of information that lead to mistakes and wasted time. Ultimately, the limitations of each of these options make them prohibitive as a sustainable platform for quoting.
Are you losing business?
Do you find yourself unable to respond to a quote for days or weeks, or forgetting to respond entirely? In the world of B2B sales, winning work is tied directly to how quickly you can provide a quote. Without automated quoting software, building a quote can be incredibly time-consuming, especially when data is tied up throughout multiple silos. Your competitors may be winning jobs you’re capable of simply because they responded faster than you.
Is your pipeline as strong as it could be?
Every job starts with a quote: you can’t make money without making parts at a profit, you can’t sell parts without winning jobs, and you can’t win jobs without quoting. Think about how many more active jobs you could have in the pipeline by eliminating quoting as a bottleneck. With a stronger quotes pipeline, you also can manage it more effectively by prioritizing the jobs you want the most.
What Paperless Parts Customers Are Saying:
“You have all your documentation right there. You open up that quote and you’ve got your material quotes, your outside processing quotes, and programming and machining notes. You have all relevant and related documentation in one centralized and digital location that we can share with our team so there is no miscommunication or risk that we will miss something on the quote.”
– Hernan Ricaurte, President, Ricaurte Precision
The ROI of CPQ Software
What does CPQ software cost?
In the CPQ space, you get what you pay for. Depending on the number of users and types of applications, it may cost anywhere from tens of dollars to several thousands of dollars per month to use. In the manufacturing space, quoting software tends to be more expensive because of the requirements to work with geometric models. Software that provides this type of technology is expensive to buy, build, and maintain, thus the companies that own them need to be able to offset the cost with higher prices.
The business impact of CPQ software
For the manufacturing industry specifically, quoting software can provide value across multiple areas of the business. While there are dozens I could speak to, I’ll highlight five key points here that are especially tangible:
1. Maximize profit margins. CPQ software makes it easy to adjust margins both systematically and quote by quote. This capability enables you to remain flexible to market demands, generate more revenue, and increase profit margins. Paperless Parts customer, Momentum Manufacturing Group, recently increased profit margins by 4% by leveraging these CPQ features within Paperless Parts.
2. Increase speed, reduce errors. Quoting software streamlines your work. For Paperless Parts customer Hernan Ricaurte (quoted earlier), the ability to annotate and share 3D models, centralize all information, and minimize delays in communication, and organize data has reduced their quoting time by 25%.
3. Reduce errors. Using CPQ software allows you to more accurately price jobs. If you mistakenly underquoted a part, you’re losing out on money. Having software that provides guardrails prevents mistakes and reduces the cost of correcting errors down the road.
4. Future-proof your business. It’s no secret that the manufacturing industry is experiencing a critical labor shortage and skills gap. To exacerbate things further, many manufacturing business owners are getting close to retirement age. Quoting software helps you bake in their tribal knowledge to future-proof the business and make sure things don’t fall apart when experienced employees move on. Not only that, but when experienced estimators move on, quoting software makes it easier to bring in new estimators and train them with consistency.
5. Prepare for the opportunity to consolidate. Consolidation has been on the rise in the industry. Businesses that aren’t able to hire skilled employees are opting for acquisition by larger capacity shops to keep things running smoothly. CPQ software can help put in place the standardization and repeatable processes that help your business smoothly undergo a merger or acquisition. Having quoting software also makes your business more attractive to sell; would you rather sell your company for 0.5x revenue or 2x revenue?
What to look for when evaluating CPQ software?
Business Decision Support
Each job is different, but the steps you take to make a part are often very similar. Look for a quoting platform that can break a job down into its discrete manufacturing steps and provide insight into pricing for each of those steps. This gives the operator freedom to make ad-hoc changes, but also guardrails to make their jobs easier. The more decision support that the software can provide to arrive at accurate pricing – be it in the form of automated decision making or assistive tools – the more value you’ll realize.
Ability to Consume Raw Data
When looking for a CPQ software to support your manufacturing business, make sure that it is able to consume the raw data you typically work with. You rely on technical files to communicate product requirements: prints, models, spreadsheets, and more. Make sure the quoting software you choose is able to consume all types of documentation you rely on to quote.
Make sure the software makes your company look good. CPQ platforms often provide a mechanism for your company to provide a digital quote to the customer. This makes it clear to your client base that you’ve invested in modern technology. This consistency builds trust. Overall, showing that your shop is professional can take you from “just another supplier” to the top of a buyer’s list.
Carefully choose a CPQ provider who demonstrates continuous improvement and a mission-driven, customer-centric approach. Partner with a company that will be there to hold your hand when you need it, won’t abandon you, delivers on the value propositions they’ve promised you, relentlessly improves their product, and has your customer persona top of mind.
What Paperless Parts Customers Are Saying:
“If you are considering Paperless Parts and you have an environment where you need to respond quickly to your customers and are hungry for business, it is a no-brainer. They will take great care of you and make sure that you have all the tools you need to do your job.”
– Matt Newman, Operations Manager, Athena Manufacturing
At the end of the day, you know what’s right for your business. But if you’re a custom parts manufacturer thinking about whether or not to invest your hard-earned time and money into new technology, CPQ software provides flexibility and consistency where it matters. With the right partner, the ROI is undeniable.
Want to see why Paperless Parts is the highest-ranking CPQ for contract manufacturers and job shops?